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DreamWorks Animation launches family-oriented YouTube channel

DreamWorksTV will feature familiar DreamWorks Animation characters such as Shrek, above, Puss in Boots and Po, but most of the programming will consist of new characters aimed at the Internet generation.
(DreamWorks Animation / June 11, 2014)

DreamWorks Animation — the studio behind the "Shrek," "Kung Fu Panda" and "Madagascar" movie franchises — has launched a family-oriented YouTube channel in the latest move by Hollywood to target the Internet generation.

The Glendale company on Monday debuted DreamWorksTV on YouTube, part of an ongoing strategy to tap into the world's most popular online video platform. The channel will include a mix of original animated, live-action and reality shows, mostly two to five minutes long.

The launch marks another effort by DreamWorks to expand its business beyond the big screen. It's also one of the most ambitious moves to date by a Hollywood studio to reach younger viewers, who watch more entertainment on multiple devices and in bite-size portions.

DreamWorksTV will be operated by the same team that produces AwesomenessTV, the fast-growing YouTube network for teens that DreamWorks acquired a year ago.

"You could go out and buy a cable channel for $1 billion and spend $1 billion to program it, or you can go where the eyeballs are going fast and furious, which is mobile and online," said Brian Robbins, founder of Santa Monica-based AwesomenessTV. "Kids are consuming their content on tablets and phones in an enormous way, and we felt, if we're going to make original [intellectual property], why not make it for that audience?"

As more viewers and advertisers migrate online, studios have been scrambling to keep up with the shifting landscape.

In March, Walt Disney Co. agreed to acquire Maker Studios Inc., the Culver City digital media company behind YouTube successes such as "Epic Rap Battles of History" and PewDiePie. In February 2013, Fox formed a multi-year partnership with Wigs, a new YouTube channel focusing on women.

Malik Ducard, Google's content partnerships director, said DreamWorks' collaboration with YouTube highlights the "very natural" progression of making entertainment available on as many platforms as possible, including movie theater screens, television sets, computers and mobile devices.

"Studios see YouTube as a good place to extend what they're doing and build community," Ducard said. "There is demand there."

In some ways, the Hollywood studios are following in the footsteps of TV personalities such as Ellen DeGeneres, Jimmy Fallon and Jimmy Kimmel, who host their own TV shows but turn to YouTube to build large fan communities.

"It's both extending their reach but also complementing what they're doing on television," Ducard said. Instead of thinking about appealing to just television viewers or moviegoers, content creators today "are interested in tapping into audiences.... YouTube has large audiences."

DreamWorks itself has been building closer ties to YouTube. The Google-owned video-sharing site now attracts more than 1 billion unique visitors each month.

In January, DreamWorks and YouTube launched YouTube Nation, a new daily show that features some of the best and most popular videos on YouTube.

"We're tapping into the invaluable knowledge that Brian has amassed from his success with AwesomenessTV to create a unique, short-form, laugh-out-loud mobile experience for families," DreamWorks Animation Chief Executive Jeffrey Katzenberg said. "This is a huge opportunity for the DreamWorks brand."

The channel also represents an ongoing effort to make DreamWorks Animation's operations less reliant on the volatile movie business by diversifying into television and other areas. The company last year signed a landmark deal to produce episodic TV shows for the global-streaming service Netflix.

The diversification comes as DreamWorks faces growing pressure to improve financial results in its core business.

DreamWorks' share price has tumbled in the last year after box-office misfires, including "Mr. Peabody & Sherman," for which the company recently took a $57-million write-down.

The stock fell $3, or 11%, to $24.35 on Monday after last weekend's release of "How to Train Your Dragon 2." The well-reviewed movie pulled in nearly $50 million at the box office, but that was less than what some analysts had expected.

Analysts had a mixed reaction to the DreamWorksTV announcement.

"They need to get their films in the moneymaking territory," said Vasily Karasyov, an analyst with Sterne Agee. "All these digital initiatives are pie-in-the-sky sort of thing."

But Tony Wible, media analyst with Janney Capital Markets, said the channel was a prudent investment. "They are investing in the future," he said. "As viewing patterns fragment … there is a risk that ad dollars will move online, so this is a way to hedge their bets."

Although DreamWorks will receive a share of advertising revenue from the TV channel, the venture is not expected to be a big moneymaker for the studio.

The goal is to use the channel as a testing ground for potential new TV shows and movies. It can take at least four years and more than $100 million to produce a single animated movie. A typical show on DreamWorksTV would cost a few thousand dollars a minute.

"It's an opportunity to efficiently test and grow audiences for new" intellectual property, said Birk Rawlings, head of animation for DreamWorksTV. "It's much easier to try things when there isn't the same kind of pressure to perform as there is in the television or feature-film business."

The channel will feature familiar characters such as Shrek, Puss in Boots and Po, but most of the programming will consist of new characters aimed at the Internet generation.

Among the new shows are reality TV programs "Prank My Parents and "Record Setter Kids," as well as animated Web series such as "Jimmy Blue Shorts," "Gorillaville" and "Report Card."

The channel will also feature characters from the Classic Media library that DreamWorks acquired in 2012 for $155 million. For example, a new series called "Richie Rich" will premiere this summer.